The Outrageous 5-year Rise of College Sports Spending
by Jordan Weissmann, 2013-01-22
So this probably isn't going to make anyone forget about the bizarro, Catfish-meets-Rudy saga of Manti T'eo's fake girlfriend. But while we're all on the topic of college sports scandals, I thought I'd briefly draw your attention to a problem that will still be with us long after we've all stopped obsessing about hoax Twitter feeds.
That would be the outrageous growth of university athletics budgets, which is costing schools -- and taxpayers -- millions of dollars every year. As researchers at The Delta Cost Project show in a new issue brief
this month, among schools at the top-ranks of college sports, institutional spending per athlete swelled 61 percent between 2005 and 2010. And that may be the least worrisome part of the trend.
Even among the most visible sports schools, very few athletic departments earn enough from ticket sales, TV deals, conference payouts, and their other various revenue streams to break even. Even in the top-tier Football Bowl Subdivision -- home to BCS powerhouses like Alabama and Ohio State -- less than a quarter of 97 schools made more than they spent on sports in any given year between 2005 and 2010. But at least the big boys manage to cover most of their own expenses. As shown on this first chart, it's the colleges that don't get ESPN airtime, such as the athletic afterthoughts of the Football Championship Subdivision and non-football D-I schools, where administrations are essentially paying for their athletics budgets out of pocket. (Quick guide: Outside revenue is the green, school spending is red, and total cost of the programs are in blue).
There are serious criticisms one can make about schools that shell out to run big-time national sports programs. For instance, about 22 percent of the outside "revenue" that pours into FBS athletics departments are actually just donations, which might be more useful funding something else on campus. But at least there's a relatively rational basis for all that spending. As Mr. T'eo's whole ordeal reminds us, America is obsessed with college sports. And research suggests that a solid football or basketball season -- or merely fielding a well-known team, in some instances -- can modestly boost everything from student applications to state funding to alumni giving. Winning a bowl game, finishing with a BCS ranking, or making a nice run during March Madness really does make for wonderful advertising.
But those privileges are reserved mostly for the brand name sports programs, not, say, the basement dwellers of the Ohio Valley Conference and their ilk. Was anyone paying attention when Sam Houston State and North Dakota State faced off for the FCS championship earlier this month? Was it even on TV? Beats me. And while you might have heard of some of the D-I non-football schools thanks to their basketball programs (think Gonzaga and Seton Hall) there are many, many more that you haven't (think Utah valley and University of North Florida).
And yet, it's precisely these small, essentially no-name sports schools where administrations are spending the most institutional money per athlete. Those dynamics are pictured in the charts below, where the blue lines stand for total athletic department spending, the red lines stand for the amount paid directly by the school, and the green lines show the amount it costs to educate each student enrolled on campus.
First, here are the big boys. Obviously, thanks to their plush TV deal and packed stadiums, the FBS schools have the most to throw around. But out-of-pocket spending per student athlete has still risen 61 percent from 2005 through 2010, up to $19,318 per athlete. The cost of educating a single student, on the other hand, has gone up just 23 percent, to $13,628. By comparison, the consumer price index, which the government uses to measure inflation, grew about 15 percent during that period.
The total athletic budgets are smaller at FCS schools, and out-of-pocket spending per student has grown slower. But the cost-per-jock is still $24,407.
The figures are similar at at the D-I, non-basketball institutions.
What's driving all this growth? According to Delta Cost, the cost of facilities and equipment are rising everywhere. At the FBS schools, coaching salaries have been on the rise (remember Gene Chizik's multi-million dollar buyout at Auburn). At lower divisions, athletic scholarships have pushed up costs.
The bottom line, though, is that there are hundreds of colleges in this country where, in the face of ever shrinking state funding, administrators are choosing to spend millions on sports programs with only the faintest hope that they'll one day see a return on their investment other than the dubious intangible benefits of having a few second-rate sports squads around to keep up school spirit. Moreover, they're spending more on those programs every year. Even if athletics only make up a relatively small fraction of their overall budgets, this seems like a place where more of higher ed needs to think about cutting.
If only these budget problems were a hoax too.
This first appeared in theatlantic.com